A possible trade war with China, which Treasury Secretary Steven Mnuchin announced earlier this month was “on hold,” appears to be back on.
The White House announced today that the U.S. will impose a 25 percent tariff on $50 billion worth of Chinese imports that contain “industrially significant technology.” That’s down significantly from the potential $150 billion in targeted goods that President Trump initially threatened.
A final list of covered products is expected to be announced by June 15, The White House said, although the Trump administration’s preliminary list, released in April, included TVs, other consumer electronics, and machine components.
See: Trump To Place Tariffs On Chinese Consumer Electronics
The threat of import tariffs has kept retailers holding their collective breath, for fear that higher prices — and a potential trade war — could wreck the CE industry’s current recovery.
“While the economy has been strong, tariffs and trade wars loom on the horizon,” ProSource chairman and Huppin’s principal Murray Huppin reminded fellow members at the buying group’s Spring Meeting last month.
Distributor Fred Towns, president of New Age Electronics, echoed those concerns in a recent interview with TWICE. “Right now, things are very positive in the U.S., and there’s a lot of excitement out there over technologies that used to be ‘Star Trek’ tech,” he said. “If tariffs challenge that, I hope the leadership makes the right decisions and works it out.”
And in a statement issued this morning by the National Retail Federation (NRF), the trade group’s president/CEO Matthew Shay warned that imposing “job-killing tariffs … will lead to higher costs for consumers, fewer jobs and retaliation.”
Shay added that “the lack of certainty surrounding the administration’s plans is creating significant uncertainty for American business.”
He also cited a recent Consumer Technology Association (CTA) and NRF study showing that tariffs on $50 billion of Chinese imports, plus the expected retaliation, would cut U.S. gross domestic product by nearly $3 billion and cost Americans 134,000 jobs.
The White House said the tariffs are being imposed to prevent Chinese pilfering of U.S. intellectual property, limit China’s access to security-sensitive technology, and to counter that country’s own barriers to trade.
Related: CTA Slams Aluminum, Steel Tariffs
The announcement comes amid a complex web of negotiations with China that include President Trump’s support of telecommunications company ZTE over the objections of Capital Hill and America’s intelligence community.
See: Trump Helping ZTE Re-Open For U.S. Business
The trade talks also dovetail with the on-off-on-again meeting between Trump and North Korean leader Kim Jong-un; a $500 million loan from China to a Trump Organization project in Indonesia; and China’s granting of valuable trademarks to senior White House adviser and presidential daughter Ivanka Trump.
